Archive for Thursday, May 18, 2017

House negotiators back away from full repeal of 2012 tax cuts

Reps. Steven Johnson and Tom Phillps, facing, the chair and vice chair of the House Taxation Committee, confer with House Republican Leader Don Hineman, far right, and Republican House staff during a break in conference committee negotiations on a bill to fully repeal the tax cuts that Gov. Sam Brownback championed in 2012.

Reps. Steven Johnson and Tom Phillps, facing, the chair and vice chair of the House Taxation Committee, confer with House Republican Leader Don Hineman, far right, and Republican House staff during a break in conference committee negotiations on a bill to fully repeal the tax cuts that Gov. Sam Brownback championed in 2012.

May 18, 2017

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— House Republicans on a tax conference committee Thursday backed away from an offer they made earlier in the week to vote on a bill that would fully repeal all of the income tax cuts that Gov. Sam Brownback championed in 2012.

That move came just as Senate negotiators said they were ready to accept the House offer. The only detail they wanted to work out was the question of which chamber would vote on the bill first.

But after conferring with House GOP leaders in between meetings of the conference committee, House Taxation Committee Chairman Steven Johnson of Assaria said the House was no longer interested in working on a full repeal bill, at least not for the time being.

Reps. Steven Johnson and Tom Phillps, facing, the chair and vice chair of the House Taxation Committee, confer with House Republican Leader Don Hineman, far right, and Republican House staff during a break in conference committee negotiations on a bill to fully repeal the tax cuts that Gov. Sam Brownback championed in 2012.

Reps. Steven Johnson and Tom Phillps, facing, the chair and vice chair of the House Taxation Committee, confer with House Republican Leader Don Hineman, far right, and Republican House staff during a break in conference committee negotiations on a bill to fully repeal the tax cuts that Gov. Sam Brownback championed in 2012.

"I don't know that it's withdrawn. It's something we can continue to work towards," Johnson told reporters afterwards.

Meanwhile, Johnson and other Republican leaders in the House acknowledged Thursday that they are working to put together another tax plan, one they think Brownback would support, that some have already started calling a "kitchen sink" plan.

It would include a combination of income tax changes, sales taxes on certain services, liquor or tobacco taxes, an increase in motor fuel taxes, and possibly a change in the statewide 20-mill property tax for public schools.

Perhaps ironically, Democrats who have been the harshest critics of Brownback's 2012 tax cuts also put up the most resistance to running the full-repeal bill.

"I and many others in the chamber have said time and time again that before we move on a tax policy and finalize what we're going to vote on, we need to know the cost of two things: the cost of the budget; and the cost of the new school finance plan," Sen. Tom Holland, D-Baldwin City, told the conference committee during its first meeting, when the House offer was still on the table.

"I'm really disappointed, quite honestly, this offer is being brought to the table today because we have in no way resolved what we want to spend on schools," Holland continued. "And my fear, just to speak rather bluntly, is that somebody is trying to get rid of exit paths to get us out of here in a weak fashion."

A full repeal of the 2012 tax cuts, effective July 1, would generate an estimated $1.4 billion over the next two fiscal years. That would be enough to close the state's looming budget shortfall and pay for a significant increase in school funding.

Conservatives in the House, however, pared down the size of the school finance package they were considering this week to phase in a $280 million increase over two years. They argued that neither chamber so far had shown a willingness to pass a large enough tax plan to fund the five-year, $750 million increase that was originally on the table.

Holland, however, argued that Democrats couldn't vote for a tax plan until the cost of the final school finance bill is known.

"My fear is that what we're doing now is that we're going to get rid of one of those pathways out of here because people will be more reluctant to vote for a tax plan if they can't justify to their constituents why the money was needed," Holland said.

Republican leaders, on the other hand, have said they want to pass the tax package first in order to put limits around the discussion of the budget and school funding.

Johnson said that he understood Holland's arguments, and that the question of which comes first, taxes or spending, was part of the reason behind pulling back the offer to vote on a full-repeal bill.

"I think the chicken-and-egg challenge is still there," Johnson said. "I think the senator (Holland) in good faith asked questions regarding what I knew of the order, which I don't, but I think that indicated the need for the group that might support a full repeal (to have) more information before they could support that in good faith."

Thursday marked the 94th day of what is scheduled to be a 100-day session. Senate leaders had said Monday that they intended to work through this weekend in hopes of finishing the session on time, but that appeared less likely Thursday after the tax negotiations were stalled, because currently there isn't a tax bill for either chamber to debate and vote on.

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